26 Aug 2014

Owner accused of Ponzi-like scheme

7:08 pm on 26 August 2014

The owner of a failing insurance brokerage illegally used clients' payments to prop up his company in a so-called "money-merry-go-round" likened to a Ponzi scheme, a court has been told.

Grant Malcolm Herbert has denied 26 charges brought by the Serious Fraud Office.

The 63-year-old ran Herbert Insurance Group Limited, which owed $3.1 million to insurers when it was liquidated in 2011.

The jury at the Auckland District Court was told today that, although customers' insurance payments were meant to be forwarded, some were used for paying staff wages and rent.

Mr Herbert is also accused of paying someone $159,000 to refer companies to Herbert Insurance.

The offences are all alleged to have taken place between 2003 and 2011.

The trial is expected to take three to four weeks.